Philip Hodgetts’ unique blend of business and production knowledge gives him insight into the current state of the industry, and a remarkably accurate look forward. Here he shares his thinking, and points to articles of interest from other sites, with context as to why they're interesting.

Archive for June 10th, 2009

In case you haven’t heard, The RIAA/MPAA and their international equivalents, are working desperately to make ISPs kick people off the Internet if they are accused of file sharing more than three times. (Three strikes and you’re out.)

There are so many things wrong with this idea it’s hard to know where to begin. Firstly, there’s no current legislative support for file sharing P2P being illegal and the RIAA, despite suing thousands of people, hasn’t obtained a conviction. (It obtained one conviction but the judge himself overturned it when he discovered that “making available” was not a crime, contrary to his comments to the jury during the trial.)

Then there’s the methodology. These organizations are seeking to implement three strikes merely based on their accusation. No legal due process, no right of appeal. We already know that these same clueless organizations have been very, very wrong in the past, attempting to sue people who had no computer (but may have paid for an account) or other blunder. No other place in law, particularly in a “innocent until proven guilty” legal system, allows – effectively – conviction upon accusation. There is no right of appeal.

Finally, there are already copyright laws in place that provide the protection that the copyright owners feel they need. They have it. It just has this teeny tiny shortcoming that the copyright owner has to prove that the accused actually committed the “crime”. They’d have to actually prove the case to a suitable legal standard.

Fortunately, although France’s ruling body enacted three strike legislation. That legislation was rendered Unconstitutional by the French Constitutional Council (their highest court). This is in line with the European Parliament who also ruled against three strikes laws as has the UK.

The real problem isn’t file sharing because it turns out file sharers are also those industries’ best customers and the piracy can actually help sales, but rather there’s an industry that’s changing in a way that means there is less and less need for the role that the RIAA or MPAA’s members once played.

Instead of doing the hard work of trying to find a new business model they expect governments, ISPs and just about everyone else to help maintain the one that is heading for obsoleteness. Of course it doesn’t help when the make up totally bogus numbers to support their contention as to how much is being lost to “piracy”. (I’d call it free promotion.)

Even actually studies manage to be spin-doctored beyond control, even exaggerating the number 10x, and yet no reporter or journalist checked them for accuracy, leaving the thorough debunking of the numbers to non-professional journalists. (This is why I don’t care about the news industry as it is; they’re notoriously inaccurate.)

The solution isn’t to try and prevent piracy, because it’s not possible. It’s time to realize that you can sell abundant goods at premium prices. What you have to do is to find where there’s scarcity that can attract premium prices. The role of abundance and scarcity is the subject of another post.